Softwood lumber sits in stacks at the Groupe Crete Inc. sawmill in Chertsey, Quebec, Canada, on Tuesday, Sept. 4, 2018. Lumber futures for November delivery rose $12.10, or 3%, to $414.70 per 1,000 board feet on the Chicago Mercantile Exchange after jumping by the maximum.
, Bloomberg

Escalating diplomatic tensions between Canada and China aren’t fazing the head of a Vancouver-based lumber company on a trade mission in the Asian nation.

Canfor Corp. Chief Executive Officer Don Kayne said the trip is progressing smoothly and he has no worries about being detained. “We’re not too concerned,” Kayne said by telephone from Beijing. The company is focused on expanding its business and demonstrating its commitment to Chinese customers, he said.

While the Asian trade mission was led by British Columbia’s forestry minister, the government backed out of the China leg of the trip earlier this week due to the “international judicial process underway” related to Huawei Technologies Co., the ministry said in a statement.

Chinese officials have threatened “severe consequences” after Huawei Chief Financial Officer Meng Wanzhou was arrested in Vancouver at the request of U.S. authorities. China’s spy agency detained former Canadian diplomat Michael Kovrig during a visit to Beijing on Monday. Michael Spavor, a Canadian who runs tours and exchanges in North Korea for clients including basketball icon Dennis Rodman, was seized Monday by authorities in the Chinese border city of Dandong.

Neither China nor Canada have directly linked the two cases.

Huawei Drama Sparks Concern Canada’s Exports Could Become Target

Kayne arrived in China on Tuesday and is among a delegation of about 30 Canadians from the forestry sector participating in meetings with Chinese customers as part of the trade mission to South Korea, Japan and China. China is the second-largest buyer of Canadian lumber and has become an increasingly important market as companies seek to diversify amid a recurring dispute over softwood exports with the U.S., the biggest importer.

China is a key market for Canfor and executives have not heard any negative comments regarding Canada or noticed a real impact from the tensions this week, Kayne said. China is heavily reliant on wood imports and the company remains focused on growing its footprint in the Asian market as the country moves toward more sustainable products for its green building initiatives, Kayne said.

If China does make a move to retaliate against Canadian exports, hopefully lumber wouldn’t be a target, he said.

“It’s definitely something they’ve come to rely on in a large way,” he said of Canadian shipments. “When we get into trade it’s always unpredictable.”